AUD/USD recovers part of yesterday’s RBA-led slump

The AUD/USD pair staged a goodish recovery from sub-0.7600 level and reversed part of previous session's slump post-RBA monetary policy decision. 

The pair on Tuesday came under intense selling pressure after RBA retained its neutral monetary policy stance and reiterated risks associated with rising A$. With markets looking past the event, a modest retracement in the US Treasury bond yields failed to assist the US Dollar to build on its cautious rebound and was seen extending support to higher-yielding currencies - like the Aussie.

Traders even shrugged off today's disappointing release of the China Caixin services PMI print, dropping to 51.6 in June from 52.8 in May, with the US bond yield dynamics acting as an exclusive driver of the pair's recovery move through Asian session on Wednesday. Meanwhile, the Composite Output Index fell to 51.1 in June, marking the slowest rate of expansion in a year, but did little to stall the pair's recovery move to 0.7620 level.

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Investors focus on Wednesday would remain glued to the FOMC meeting minutes, due for release later during the NY session and would help investors determine the next leg of directional move for the major.

Technical levels to watch

Immediate resistance is pegged near 0.7630-35 area, above which the pair is likely to extend the recovery move back towards 0.7680 horizontal level before aiming to surpass the 0.7700 handle and head towards testing yearly tops resistance near mid-0.7700s.

On the flip side, weakness back below the 0.7600 mark now seems to find some support near 0.7580 level, which if broken would turn the pair vulnerable to head back towards retesting the very important 200-day SMA support near 0.7535-30 region.